While I generally agree, I think that there are some other ways that one could make games:

• One is to just do games incrementally. Like, you buy a game, it doesn't have a whole lot of content then buy DLC. That's not necessarily a terrible way for things to work -- it maybe means that games having trouble get cut off earlier, don't do a Star Citizen. But it means that it's harder to do a lot of engine development for the first release. Paradox's games tend to look like this -- they just keep putting out hundreds of dollars in expansion content for games, as long as players keep buying it. It also de-risks the game for the publisher -- they don't have so much riding on any one release. I think that that works better for some genres than others.

• Another is live service games. I think that there are certain niches that that works for, but that that has drawbacks and on the whole, too many studios are already fighting for too few live service game players.

• Another is just to scale down the ambition of games. I mean, maybe people don't want really-high-production-cost games. There are good games out there that some guy made on his lonesome. Maybe people don't want video cutscenes and such. Balatro's a pretty good game, IMHO, and it didn't have a huge budget.

I do think, though, that there are always going to be at least some high-budget games out there. There's just some stuff that you can't do as well otherwise. If you want to create a big, open-world game with a lot of human labor involved in production, it's just going to have a lot of content, going to be expensive to make that content. Even if we figure out how to automate some of that work, do it more-cheaply, there'll be something new that requires human labor.